Trust and Economic Policy

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Trust and Economic Policy
OECD Workshop „Joint Learning for an
OECD Trust Strategy”
Dóra Győrffy
Associate Professor, Péte...

Structure of the presentation
Definitions of trust
 Trust and the time-horizon of decision-making
 Trust and economic po...

Definitions


Definition of trust:

1.

“A psychological state comprising the intention to accept vulnerability based
upo...

Trust and the time-horizon of decisionmaking

Perceptions on success in Hungary (2009)
90
80
70
60
50

40
30
20
10
0

In this country it is Certain rules have to
imposs...

Consequences for economic policy



1.
2.

3.
4.




Given their need for gathering votes politicians cannot ignore th...

Satisfaction with democracy and fiscal
outcomes in the EMU 1998-2007

The success of fiscal consolidation



1.

2.

3.

4.


General finding from the 1990s: the superiority of expenditureb...

Sources of consolidation in the EU-15
during the Maastricht process

Case studies: Sweden vs Hungary
6
4

Sweden
Fiscal balance % of GDP

2
0

1990

1994

1998

2002

-2
-4
-6
-8
Hungary
-10
...

Different responses to fiscal imbalances
Sweden

Hungary

Source of imbalances

Credit boom following the
deregulation of ...

The role of trust


Method of decision-making: political consensus vs
secret planning and increased polarization



Choi...

Satisfaction with democracy in the CEE-10
(2002-2007)

Sources of fiscal consolidation

Public and private indebtedness in the CEE-10
(2002-2008)
100
90
80
70
60
50
40
30
20
10

0

Public debt 2002

Public debt...

Public and private debt in the CEE-8 in
2007/2008

Popularity of government vs trust
In a democratic regime where the possibilities for
using force to induce compliance are ...

The influence of crisis on systemic
legitimacy in Greece and Ireland
Assessment of national
economic situation

Trends in ...

Conclusions
In a low-trust environment the time-horizon of
decision-making shortens given the prevalence of
uncertainty
 ...

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